The first step in pricing is to develop pricing objectives. Management must decide what the price is intended to achieve, such as profit maximization, market penetration, market skimming, survival, target return, market share growth, or product positioning. Once objectives are clear, the organization can assess demand, estimate costs, analyze competitors, select a pricing method, and set the final price. Determining product cost is important, but cost alone does not define the pricing strategy. Competitor prices must be evaluated, but only after the organization understands its own pricing purpose and market position. Selecting a pricing method is also premature until objectives, demand, cost, and competition have been considered. Internal auditors reviewing pricing controls should test whether pricing decisions align with approved strategy. Therefore, Option B is correct.